Will New Smog Rules Hurt GM in China?


The Buick Excelle GT, a close cousin of the U.S.-market Buick Verano, is a big seller in China -- but GM's sales streak could be threatened by tough new smog rules. Photo credit: General Motors Co.

Even during the company's descent into bankruptcy here in the U.S., China has been one of the brightest spots in General Motors' (NYSE: GM  ) global operations. Buick and Chevrolet are among China's best-selling car brands, and GM leads the market -- with solid growth in sales month after month.

But that growth streak could be in trouble -- and not because GM has stumbled. China's biggest cities have a growing smog problem, and the Chinese government is considering strict new limits on new-car sales in some areas. Meanwhile, GM is investing a fortune in hopes of even bigger growth in China in coming years. Will this prove to be an expensive mistake for the General?

In this video, Fool.com contributor John Rosevear looks at what's going on in China's smoggy cities, and at the impact these proposed new rules could have on GM's growth plans in the world's largest auto market.

There's no doubt that some companies will thrive as China's auto boom continues to unfold -- but which ones? In this brand-new free report, our analysts get out in front of this trend by identifying two automakers that are poised to surge along with China's middle class. If you want to be among the smart investors who get rich from this growing trend, then you'd be well advised to instantly download our free report on the topic by clicking here now.


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